Marwan Lahoud knows exactly what the first two topics on a questioner's mind will be, so he answers them without even being asked. First is the vexed question of LFK. Since the matter of the formal integration of Germany's LFK (owned by MBDA shareholder EADS) was first raised in 2000, MBDA has spent nearly four years negotiating with itself while promising that the deal will soon be done. Since he took over as CEO in January 2003 Lahoud has been grappling with all the same issues. "EADS is a majority shareholder in a competitor," he explains, "but it has an obligation to offer it [LFK] to MBDA. What's at issue are the terms and conditions. Everyone agrees it makes sense—now, how much is it going to cost?" He laughs and continues, "Finally, we have agreed the ways and means to move forward. All that remains is the very minor matter of the price.
"If I was forced to give an answer I would say that a deal could be done by the end of the year—but on the other hand, I wouldn't like to bet any money on that timescale."
The second question that the MBDA boss has to face—one that is rising in volume all the time—is how does the company build a bridgehead into America and start doing meaningful business in the U.S.? On the face of it, Lahoud's policy is straightforward. "The U.S. market is like any other. You must sell the best technology to the customer who is the end user—not the political decision-maker—with the right industrial setup and local contribution. The only difference in the U.S. is that the market is all already held by the competition."
However, when identifying future possible co-operative programs—Lahoud cites the Kinetic Energy Interceptor (KEI) for National Missile Defense as one—his view of the American way of doing business clouds. "KEI shows the typical U.S. approach to collaborative projects—there's no money, just lip service. The international co-operative programs are always the ones that are not fully funded in the U.S., the ones that have slipped out of the budget. They'll say ‘Oh, we haven't enough money to develop KEI, let's open it up to international cooperation.' Look at MEADS, when that program was born as Corps SAM it was last on the priority list at the Ballistic Missile Defense Organization."
Furthermore, he says, "We are handicapped by a weak dollar that has introduced big cost differences. An order cycle from offer to contract will take at least two years—maybe even four, or more. So the assumptions you make at the outset do not remain constant. If we make an offer to Country A in euros and our competitor makes the same offer in dollars, by the time a decision comes four years later a competitor might have a cost advantage of 40% thanks to the depreciation of the dollar." MBDA is in Chalet K4-5 and OE11.
